Refund of tax deposits cannot be withheld without assessment or demand where limitation bars assessment and liability has not crystallised.

Amounts deposited without an assessment order or enforceable demand could not be retained where assessment was barred by limitation, and the refund claim could not be rejected merely because the dealer was unregistered. The court noted that the statutory concept of self-assessment applied to registered dealers, so the plea of admitted tax payment on self-assessment was untenable on these facts. In the absence of any crystallised tax liability, the refund issue had to be reconsidered by the competent authority in accordance with law, while the penalty challenge was not pressed.

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Issues: Whether the rejection of refund on the ground that the dealer was unregistered and that the Act contained no provision for such refund could be sustained, and whether assessment was barred by limitation so that the amounts deposited could not be retained without a demand or assessment.

Analysis: The refund claim arose from amounts deposited by the assessee without any assessment order or demand notice. The Court noted that in an earlier order between the same parties on identical facts, rejection of refund had been set aside and the matter had been remitted for consideration of the claim in accordance with law. It further held that, for both relevant financial years, the limitation period under the JVAT Act had expired and therefore assessment was impermissible. In the absence of an assessment proceeding or demand order, the State could not retain the ad hoc deposit. The plea of admitted tax payment on self-assessment was found untenable because the statutory concept of self-assessment applied to registered dealers.

Conclusion: The rejection of the refund claim could not be sustained, and the matter had to be reconsidered by the competent authority in accordance with law. The assessee succeeded on the refund issue.

Final Conclusion: The writ petitions succeeded to the extent of the refund challenge, while the penalty challenge was not pressed; the refund matter was sent back to the tax authority for fresh decision in accordance with law.

Ratio Decidendi: Amounts deposited without an assessment order or enforceable tax demand cannot be retained by the revenue when assessment is barred by limitation, and a refund claim cannot be rejected merely because the claimant is unregistered if the statutory liability has not crystallized.

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